President's weekly update
18 February 2021
Senior colleagues and I took part in two meetings on medium to longer term financial sustainability, one with Heads of Schools and the other with the chairs of our Board committees. Aside from the impacts of COVID, universities such as ours face a significant financial challenge as the majority (75%) of our income streams are declining in real terms - this includes UK undergraduate tuition fees and research and contract income. Our TRAC (transparent approach to costing) shows that we make a significant loss on both these income streams. But, our costs are rising faster than inflation, most notably staff salaries, where increments (paid to about half our staff) increase our annual salary bill by 1.4% per annum even before any cost of living increases, and extra pension costs. We currently spend over £100m on pensions with additional costs of over £7m per annum for USS coming in October.
COVID has resulted in additional costs (e.g. postgraduate researchers extensions, digital learning technologists and COVID security measures such as testing and extra cleaning), and reduced income, notably on rent rebates for students in our residences, which could cost at least £20m, and conferences, catering, interest on investments and philanthropy. The pandemic has also led to major savings though, many are short-term or simply delayed, as we are spending less on ‘other operating expenditure’. In the current year our income has been boosted by additional student numbers. We took extra home undergraduate students due to the change in A-level grades - which was not planned or intended and brings little net income because home tuition fees have been static for many years. We have invested more to deal with additional students and will probably need to invest more still to limit the loads on our staff. Hence we are now working on how we can make savings. Our strategic change programmes, such as SEP, will help to deliver this largely through more efficient processes, but first require investment. We will also look at generating additional income so that we can reinvest in our core activities.
There will be a staff open meeting on our finances on Friday, 5 March that you can register for.
I attended a meeting with Kwasi Kwarteng, Secretary of State for Business, Energy and Industrial Strategy, with a group of north west business leaders. I spoke about Innovation Greater Manchester and the contribution this could make to the ‘levelling up’ agenda that is a priority for government. The discussion focussed on economic recovery from COVID, net zero and inequalities.
The same topics featured at another meeting with regional business leaders and Tony Danker, Director General of the Confederation of British Industry (CBI) and an alumnus of the University, that Professor Fiona Devine, Head of the Alliance Manchester Business School, and I attended. Fiona talked about our Productivity Institute and its plans to work with local businesses large and small.
Students in the School of Engineering asked about workloads, when we would be able to return to in-person teaching, technical support, mental health and wellbeing. With staff we talked about the challenges of additional students and workloads, getting time back for research, support for staff wellbeing, learning about good practice in teaching and the USS pension.
Last week I mentioned the very strong student unit evaluation scores for Semester 1. To celebrate and build on this success and support our continued transition to high-quality blended learning, we are funding 20 President's Student Partners to analyse in detail and action the survey feedback. The Student Partners will have part-time, paid employment in the faculties and UCIL, enhancing links to the Students’ Union and helping shape how we survey students.
Professor April McMahon, Vice-President for Teaching, Learning and Students, and I had a regular meeting with Kwame Kwarteng, General Secretary of the Students’ Union. We discussed shared plans for civic engagement with the other Greater Manchester universities, support for international students, meetings with student course reps and our Living Cost Support Fund to help students.
You may have seen the report on recent actions on equality, diversity and inclusion and our partnership with students. I have just taken the courses on diversity in the workplace and unconscious bias that you can find on our website.
In recognition of the efforts being made by all our staff and the impact that the ongoing pandemic is having on us all, we will be giving all staff two extra days holiday around the Easter break on Thursday, 1 April and Tuesday, 6 April.
Nancy Rothwell, President and Vice-Chancellor